No Matter What, PPACA Ruling Will Impact Employers

The legal fate of the Patient Protection and Affordable Care Act (PPACA) is poised to take center stage at the nation's highest court in the next few months.

The Supreme Court recently agreed to consider a number of lawsuits pertaining to PPACA and likely will start hearing arguments in March, with a final ruling expected in June, according to a report in Employee Benefit News.

The full impact of a ruling against PPACA will depend on whether the court strikes down the entire law or only sections of it. In fact, a partial ruling might create some big problems, according to Diane Boyle of the National Association of Insurance and Financial Advisors.

"If the court strikes down the individual mandate while leaving the law's other provisions intact, it could create havoc in the health insurance marketplace," Boyle told EBN. "[The] lack of a mandate would mean individuals would have no incentive to seek health insurance until after they become injured or sick. If only sick and injured people are buying insurance, clearly that's not sustainable."

As long as the law's future remains unclear, employers are stuck in limbo regarding the main provisions of the legislation that are set to start in 2014.

One provision of the law that was initially welcomed by employers -- and that is effective now -- is a special tax credit for small businesses. However, the government's effort to tout this benefit is falling short of expectations, according to a report by CCH. The government reported that about 228,000 small employers claimed more than $278 million in tax credits in the law's first year. That's far short of the estimated 4.4 million taxpayers who could possibly qualify for the credit.

William Dennis, a research fellow at the National Federation of Independent Business Research Foundation, told Bloomberg BusinessWeek that the low numbers are not surprising, arguing that the idea of the tax credit was simply "a talking point for political reasons; it wasn't a serious thing."

White House officials deny that charge and counter that few businesses accessed the credit because most companies weren't able to adjust employee coverage in time to take advantage of it yet.

Still, others complain that the rules regarding the credit and eligibility are so confusing that most employers don't understand it and don't have the time or resources to sort it out, according to the BusinessWeek report.

Although the federal government has pledged to increase education efforts, it might all become moot if the right-leaning court throws out the law. However, the tax credit might survive the court's moves, even if other provisions are tossed.

No matter which way the court rules, it will create some level of burden on employers, Keith R. McMurdy of N.Y.-based Fox Rothschild told EBN. "It will cause a significant rippling throughout what we've done the last two years either way," he said.